Richard Fleming, Mark Firmin and Howard Smith, of KPMG Restructuring, were today appointed administrators of Leeds United Association Football Club Limited at the request of the Club’s directors.

Shortly after their appointment the joint administrators agreed to sell the business and its assets to a newly formed company called Leeds United Football Club Limited, the directors of which are Ken Bates, Shaun Harvey and Mark Taylor.

The sale of the Club is subject to approval by its creditors, via a Company Voluntary Arrangement (CVA). This would see creditors forgoing a significant element of their debt, in order to allow the Club to continue trading under new ownership. The creditors’ meeting, to consider the CVA, will be held before the end of May. The Football League will also need to approve the sale.

“We were asked by the board of directors to advise Leeds United on Monday 30 April 2007. The Club has experienced significant financial difficulty for some years and was burdened with historic debt and wage structures.

“It was necessary for the Club to enter administration as its balance sheet dated 31 March 2007 indicated debts totalling approximately £35 million, with a cash injection of approximately £10 million required to continue trading. Further, Her Majesty’s Revenue & Customs (HMRC) recently issued a winding up petition for approximately £5 million. If this debt had not been paid by 25 June 2007, the Club may have been forced into liquidation.”

The administrators understand from discussions with the Football League that the administration will result in the immediate deduction of 10 points from the Club’s current points total in this years Championship. This means that next season the club will start the campaign in League One with no points deducted.

Richard Fleming concluded: “This agreement has been reached quickly to maximise the possibility of survival of this major football club, to minimise uncertainty for all the Club’s stakeholders and supporters and to allow the Club to plan ahead for next season. There is now a big decision for the creditors to make at their forthcoming meeting.”

This whole thing reeks of underhanded financial dealings - the Club gets sold to some existing investors at a good price, the other creditors get screwed and the debts are cleared. The procedure makes no sense to me. I think over here a club would be forced to sell its assets (i.e. players under contract) to repay the creditors before having the debt expunged.

_________________"If you cannot answer a man's argument, all it not lost; you can still call him vile names. " Elbert Hubbard.

Interesting discussion going on here. It looks like Ken Bates wins all ways.

No surprise there then. IIRC he did something similar with Chelsea when they were in mountains of debt. He developed another company to run in tandem with Chelsea FC (something like Chelsea holdings) then carefully transferred all the debts of one on to the other. When he wound up one of the companies with loads of unpaid debts the creditors were a bit miffed to say the least that it had no assests. The ground and the playing staff had all been shifted into the solvent company.

_________________"Get your feet off the furniture you Oxbridge tw*t. You're not on a feckin punt now you know"

'Wait on, SPAM have just got away with what they wanted because they are in the big club clique, does anyone think that maybe, just maybe people will cotton on if we do the same by giving Leeds what they need two weeks later?'

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